Re-Use Austria
A project of the turquoise-green government program is about to be implemented: the reduction in VAT on repairs of bicycles, clothing and shoes will soon be cast into law.
Climate protection minister Leonore Gewessler presented additional investments in climate protection in mid-June after a retreat from the turquoise-green federal government. In 2020 and 2021, 1 billion euros are to be invested in the fight against the climate crisis. This creates jobs, regional added value and ensures a better future, the minister said at a government press conference. For the next two years, additional funds will flow primarily into the areas of renovation, renewable energy, research and repair.
Reduction from 20 to 10 percent
A reduction in sales tax is in the offing in the repair sector. But not in all areas, because here the applicable EU law restricts. The Federal Government is carrying out what is possible under the European VAT Directive - thus the reduction affects the "small repairs", specifically the services of bicycle repair shops, tailors and cobblers. Specifically, the change means a reduction in sales tax from 20 to 10 percent (there was also information circulating that it would only be reduced to 13%, although the 10% is correct). This project, the “tax concession for small repair services and the sale of repaired products” has already been implemented in the government program committed. Next, the precise design of the sales tax reduction has to be done by law. The measure is not limited in time, but will apply indefinitely. We are pleased that our lobby work is now bearing these fruits!
The measure is also welcomed by the WKW. "With the decision to hand over a product to a handicraft company for repair, in the current construction phase after the corona lockdown is a step that has many positive effects for both sides. The companies and their employees come out of the crisis more quickly, apprenticeships can be saved or even created, and in addition to specialist advice, customers receive high-quality repairs that breathe new life into their favorite piece and at the same time protect the environment by avoiding waste. That is regional shopping too, ”emphasizes Maria Smodics-Neumann. (More here.)
Expansion to other areas is being examined
According to the climate ministry, a possible expansion to other areas will be examined over the summer. The "further development of the EU VAT Directive to enable further tax concessions for repair services" is part of the government program and we demand that Austria is strongly committed to this at EU level. It became clear that the reduction of VAT on all repairs makes sense in a study by the Institute for Economic Research analyzed in detail.
We can only hope that the measure will not replace the introduction of a nationwide repair bonus. In our view, a multitude of incentives for repairs make sense and are necessary to both strengthen companies and motivate consumers to make sustainable behavior changes. This is also from the consumer protection association in a press release stressed.
The extent to which the VAT reduction is actually received by the customers cannot be predicted, but it does support the craftsmen in any case. A repair bonus in turn gives consumers money back and rewards the willingness to use objects for longer. Starting in the fall, Vienna will have its own system of repair funding, more on that soon in RepaNews.
More info …
WKW press release: WKW-Smodics-Neumann: Tax cut on repairs an important step (APA OTS)
Press release from the VSV: If you want to promote sustainability, you have to promote repairs
Wiener Zeitung: Encourage investment, housing and climate protection
RepaNews: Re-use and repair in the new government program
RepaNews: Repair is systemically important and must now be promoted
RepaNews: VAT reduction would encourage repairers and the circular economy
Repair shop: Study: Effects of a reduced VAT rate on repair services
RepaNews: WKW's trade and craft division is committed to repairs
